Millions of households are facing higher energy bills from 1 October 2025, with Ofgem confirming the energy price cap will rise by 2%.
From October 2025, a typical household paying by direct debit will see annual bills jump from £1,720 to £1,755, about an extra £2.93 a month.
While it’s a small increase compared to previous years, the timing stings. Costs are climbing again just as household budgets are already being squeezed by rising food prices and higher living costs. And we’re heading into the colder, winter months when more energy is generally used.
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Why are bills going up?
Surprisingly, this isn’t down to soaring wholesale gas prices this time. Instead, government measures are the biggest driver of the increase:
- £15 extra per household: The government has expanded the Warm Home Discount, which gives £150 off energy bills to an additional 2.7 million households. But to fund the scheme, everyone else is picking up the tab.
- Network upgrades: A chunk of the rise also covers investment to modernise the UK’s power network.
Ofgem says the changes will ultimately help create a “healthier market” with more people on cheaper fixed deals and better consumer protections.
Who’s affected
This rise will impact around 20 million households paying by direct debit, plus 14 million prepayment meter users.
Those on a fixed tariff won’t see any changes until their deal ends, but if you’re on a variable tariff or prepay, the price cap applies to you.
How to soften the blow
Energy bills aren’t something you can avoid, but there are steps you can take to reduce the impact:
- Look at fixed deals – Some fixed tariffs could save £200+ a year compared to the new cap.
- Switch suppliers – With more competitive deals coming back, it’s worth checking if you can save.
- Pay by direct debit – Ofgem says this remains the cheapest way to pay.
- Check energy-saving schemes – If you qualify for the Warm Home Discount, Energy Company Obligation (ECO) grants, or local council support, it’s worth applying early.
You can also check out our energy-saving tips to cut costs further.
The bigger picture
Energy minister Michael Shanks says the long-term goal is to get the UK off the “rollercoaster” of volatile fossil fuel prices by investing in clean, homegrown energy. But for now, families are still facing higher costs, and inflation is expected to climb above 4% in the coming months, adding even more pressure on household budgets.
Skint Dad says…
Even small bill rises can knock a budget off track, especially when food and other costs are already climbing. Now’s the time to check your tariff, hunt out support schemes, and make sure you’re not paying more than you need to.
